We should sell NZ Post while we can

New Zealand Post will stay Government-owned, says Finance Minister Bill English, after news it is axing up to 500 jobs over three months.

The planned cuts, announced yesterday, form part of the 1500 to 2000 job losses NZ Post signalled at the end of 2013.

“New Zealand Post can confirm it is about to enter a period of consultation with, predominantly, managers and specialists at head office and in support roles. The roles are mainly in Wellington, Auckland and Christchurch,” a spokesman said yesterday.

Commenting on the news, English said NZ Post was adjusting to the reality of falling letter volumes and “working out how to become a bit more of a logistics company”.

Asked by reporters if the Government wanted to own a logistics company, English said: “It’s Government-owned, we’re going to be keeping it, so they’ll have to find a solution.”

Despite the very good management, NZ Post has a bleak future as it is selling horse and carriages in a motor vehicle world.

The time has come to split Kiwibank from its parent NZ Post and sell them both.

Kiwibank is ripe for partial privatisation. If the Government floated 49 per cent on the NZX it could net $750 million and deliver the company some much needed capital to grow and boost its profitability. …

NZ Post is politically more difficult and splitting Kiwibank out of the business would leave it vulnerable.

To make the split work the Government needs to really bite the political bullet and sell NZ Post too.

As evidenced by the latest large scale job cuts, the business is facing disruption a scale that threatens its very future. The business of letters is dying fast and the business of parcels is already fragmented and highly competitive.

It should be sold completely, while it is still worth something. Its best long-term option is to be part of an industry consolidation and taken over by a bigger freight and logistics company.

I like that idea – sell 49% of Kiwibank and 100% of NZ Post.

We should also sell TVNZ while it is worth anything. In a decade or two NZ Post and TVNZ will probably resemble Solid Energy!

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Comments (51)

What a load of cowardly shite from English down to the bottom feeders, David Farrar. The reality is; the vision is bleak because of the bleak vision-less merchants who robbed Peter to pay Paul by using NZ post to defray the set up expenses of Kiwibank.
If NZ post was promoted as a delivery of goods in the same way as USPS is here in the States, volumes would be growing not falling. We get seven day postal service and that won’t change in the foreseeable future wth a strong economy.

Peter

tom hunter

In a decade or two NZ Post and TVNZ will probably resemble Solid Energy!

A decade? Somebody should run the graphs of their rate of deline in revenue, profit and total value. I’d bet it’s acclerating, and that a decade is optimistic. The time for a TVNZ sale was 1999 at the latest, before BooBoo and her ilk got their hands on it.

The Government should sell it, while it can.
…
We should also sell TVNZ while it is worth anything.

And give Andrew and company a sniff of power? There’d be nasty arguments, and in a world of MSM-emotive-driven headlines and Twitter and the return of Roger and Ruth and blood and it would just awful – and as result Key and National would lose those arguments.

Just let them all run down quietly and die. It’s a natural process and by the time they’re gone few will notice, and National may have celebrated 25 years in power.

holysheet

peterwn

There is an issue with postal services that has not really been addressed. The British Postal Service developed from an internal British Government messenger system and provided a universal ‘penny post’ system replacing haphazard networks then in existence. The existence of a postal system has become enshrined in the law, both with laws that ‘deem’ delivery and Common Law such as the ‘postal acceptance rule’ (a contract is complete when a letter of acceptance is posted rather than received).
Hence there is legal reliance on a postal delivery system with everyone needing a postal address at which they can receive things. NZ Post attempted to charge RD people hefty delivery fees but that was abandoned.

The time has probably come when the Law Commission should be asked to study the legal implications of a restricted or even non existent postal system to both protect the interests of those who need to ‘serve notice’ and those who could be disadvantaged if they cannot ‘receive notice’. In particular for example for those who cannot be physically reached but are prepared to make themselves accessible by internet should be able to receive stuff by internet. Special arrangements may be needed for those who genuinely cannot readily receive mail nor have internet access – it may be that presumed ‘notice’ periods may need to be considerably lengthened for such people.

Perhaps in future all car owners may be required to provide a direct debit authority against a bank account or credit card as a condition of vehicle registration so registration fees, infringement fees and fines can be automatically collected.

Milhous

I imagine this could be part of the 2017 manifesto. Key always thought that 4 terms would be very unlikely so we are into bonus territory.

Given labour are going all Sanders/Corbyn Loony left, what better way to contrast with them. They propose tax rises, Nats go tax cuts. They propose a pseudo nationalisation of power, the Nats make the very easy and irrefutable argument for selling NZ Post and MOM for Kiwibank.

Given labour are going all Sanders/Corbyn Loony left, what better way to contrast with them. They propose tax rises, Nats go tax cuts. They propose a pseudo nationalisation of power, the Nats make the very easy and irrefutable argument for selling NZ Post and MOM for Kiwibank.
===================================
Remind us again when the Nats. reduced our tax burden. Swapping the collection points doesn’t count.

V

Whoever mentioned usps has no clue about the size of losses this organisation racks up. I think nzpost has generally been well run and responsive to market demands, especially when compared to overseas counterparts. It acts as an agent for Dhl, has after hour courier delivery services where customers are more likely to be home. Post shops are open on weekends in shopping malls and areas where there is demand and customer service is generally pretty good.

I would unburden it of carrying Kiwibank which is a parasite feeding off the host business. Sure a future Nzpost may not be as large as it currently is now but it still provides essential services particularly to rural communities. These would be the first to go under purely private ownership. As has already happened the business will orientate more toward parcel delivery to support online business and the shear number of other business you can do via a postshop indicates that management does at least look for other methods of revenue.

Of all the excessive agencies and departments the government has, Nzpost would be well down my list of concerns.

Well with the Green saying they will put 100million into Kiwi bank to bring down morgages and Little saying this morning he will bully the overseas banks to do what they want investors will pull their money and go elsewhere so our economy will be fucked.Wise heads!in Government will make sure that we get our investment out of Kiwi bank and NZ Post before Labour is able to become the Government.

Milhous

I didn’t say they had. (although reducing personal tax for an increase consumption tax is better than nothing, particularly given NZ was hit by a massive earthquake during the middle of a worldwide recession)

Milhous

I think that there are some things, such as the postal system, that the Govt should always be in charge of. It’s not a matter of whether something pays or not. Is the Govt in the business of making money? Or of governing the country and making sure that we have the basic services necessary for it to function?

What happens if we sell NZ Post and (for instance) a Chinese company buys it? Would we be OK with that? I sure wouldn’t.

starboard

Reid

What no-one seems to get is that those two are govt propaganda organs. They are there to sell social engineering as much as they are there to provide “news.”

This is why their content is what it is. This is why their presenters hold the views they do. This is why even when conservatives are in power, there is never any discussion on selling them.

A lot of you people really don’t seem to understand how governments, whether Westminster democracies or any other stripe, really work.

In almost every if not in every govt in the world, social engineering is an invioable requirement. It has to happen and it will happen. In Westminster democracies social engineering has nothing whatsoever to do with keeping the party currently in power, in power. In other forms of govt it does, but not in Westminster democracies. But it has to happen and it will happen. And those two entities in our particular country, are the main organs by which it is carried forth into the stooooooooooooopid sheeple’s heads, following orders of course from its big brothers: the BBC, Reuters and AP.

stephieboy

nasska,

“Whereas Red Radio & TVNZ do nothing but fragment NZ society. Get rid of these socialist wasps’ nest first before we even look at …..”

I’m curious to know the origins in respect of this paranoid hyper alertness and super sensitivity about these ” socialist wasp nests ” after high expectations of a diet of Breitbart ,WND and the Daily Mail etc ?

tom hunter

Fletch (8,553 comments) says:
April 3rd, 2016 at 5:30 pm
I think that there are some things, such as the postal system, that the Govt should always be in charge of.

I agree when it’s a natural monopoly like Transpower. That probably applied to NZ Post even into the 1990’s – but not now.

You’d love the US in that case. The Post Office service is actually written into the Constitution for crying out loud. As a result, almost nothing can be done to fix it even as it dies faster than NZ Post.

brett68

Reid

You’d love the US in that case. The Post Office service is actually written into the Constitution for crying out loud.

The USPS was required by the Bush 43 Administration to forward-fund its entire superannuation liability. National postal services have massive employee numbers because its required, rain or shine, to touch on a daily basis every single mail delivery point in the entire country. This creates a standing network with massive overhead because of the number of employees required to service that requirement. NZPost was at one time, not sure about now, the biggest employer in the country – ~30k+ if I recall correctly. Imagine what USPS has.

So Bush 43 required it to come up with funds for the entire employee retirement fund, in advance. This of course destroyed its balance sheet. (Prepping for sale to a corporate mate, you see.)

Not sure what happened to it when Obama came in, haven’t heard anything since. May have already happened, may have been cancelled, don’t know, don’t really care.

Postal services represent communication. When the Constitution was written, it was the only thing going. Now things have changed. That probably means we should change our thinking, but let’s not sell off massive assets for peanuts because corrupt politicians want a comfortable retirement.

tom hunter

The Congress shall have Power To establish Post Offices and post Roads

So Congress does not have to establish Post Offices, they can if they choose – and 200 years ago or so they did.

Which means they can un-choose them.

But as often the case with modern nations, there’s no practical difference. The US could no more dump their Post Office than we could, not quite the third rail that Social Security and Medicare are but close.

mikenmild

I’m not sure who has it better: countries like us that make their constitution up as we go along, or the US with a panel of judges to pretend that what they are making up now is consistent with what some folks thought 230 years ago.

The Virgin

spanish_tudor

Key should have sold all these deadbeat companies (and many more – KiwiRail, Radio NZ, 100% of the energy companies) in 2008/2009 when he had political capital to burn and a majority with ACT (and without the other hangers-on).

Eight years later, and none of us would care less about asset sales. But the balance sheet would be much, much healthier. And there’d be money for tax cuts.

Jim

NZ Post could perhaps move with the times and on to something that is fast growing: logistics/delivery for online purchases.

Their Youshop service looks expensive. From their service description:

If your parcel is assessed for GST and/or duty, you will need to pay additional costs for your item to be cleared by Customs. New Zealand Post can organise the clearance of your parcel by Customs and the charge for this is NZD$135.82 (including GST) per parcel. This charge includes the Customs Brokerage charge as well as the NZ Customs Import Transaction Fee. The GST and/or duty amounts payable are in addition to the clearance charges.

Slightly OT, but is there no way to pre-clear personal shipments in NZ? I’ve been away for too long to remember. That’s usually handled by the shipper (in the case of Amazon) or courier for a much, much smaller fee.

Jack5

… there is legal reliance on a postal delivery system with everyone needing a postal address at which they can receive things.

What would/will it be replaced with? A national identity card system?

NZ Post has been talking about its future in postal services. The American etc postal address facilities it provides in a way facilitate parallel importing. Will they survive the TPP agreement? Also the foreign parcel services it is benefiting from will be trimmed when GST is applied to them.

Captain Mainwaring

And now we have the idiot James Shaw (co-leader of some communist party on the fringes of Labour) suggesting that we need to pour $100 million of taxpayers money into increasing the capital base of Kiwibank so it can be a major commercial player.
Jesus H. Christ, why don’t we nationalise the supermarkets while we’re at it?

Everything becomes User Pays, available at a price to whoever wants it, from whomever wants to provide it, no compulsion on anyone to either require the service or to supply it.

Quite naturally, current provisioning for Police and Defence would be included in the above. I do not include the Fire Service because of course they are already completely privatised, being entirely funded from insurance levies.

The upshot of such a move would mean that there would be no taxes, which has to be a plus, because why would we need to be taxed centrally if nothing was to be provided centrally; and further, no Government, because a) there’d be nothing for them to do, and b) there’d be no tax money for them to do it with.

No Government or taxes, and no Police, of course also means no Courts or Prisons, but why do we need those things anyway? They’re just a useless drain on decent hardworking folks. I mean I don’t commit crime, so why should I pay for courts or jails? Seriously.

And so it goes. This line of thinking is where you arrive if you follow the Libertarian bent to its ultimate conclusion; absolute anarchy, and the law of the jungle, is what results (otherwise known as the “free market”).

We have tried this all before, of course. It was called Feudal Britain. It fell out of favour some seven or eight centuries ago, because of course it doesn’t work. The ACT Party and others of its ilk can trot out the same tired old garbage as often and as loudly as they like, but the human fact remains, there is a need for a degree of socialism in any grouping of humans who want to call themselves a society.

Muldoon knew that. He was the most socialist Prime Minister this country has ever seen and the last great patriotic Prime Minister we ever had, and he epitomised everything that used to be good about our Party. None of the vapid gobshites who have followed him, from either side, could hold a candle to that man.

It is of course entirely possible to employ competent private professionals to run state-owned social service providers; that may well prove to be the middle ground which we have not yet tried.

NZ post isn’t just obsolete, it’s also just quite simply a shit company.

They employ thieves to sort the mail, and liars to manage/defend the thieves. A pox on all of them.

DPF:We should also sell TVNZ while it is worth anything. In a decade or two NZ Post and TVNZ will probably resemble Solid Energy!

That’s not the union/socialist way!

It must be run as it is now until it’s bankrupt. Then the man who sweeps the floors before he switches off the lights can write a moving poem about how appallingly
RIGHT WING politicians treat the working class poor!

Mind you. That was almost a piece of genuine journalism from the Horrid. We should be thankful for small mercies. And by ‘bottom feeders’, I mean the very people they are retaining at ‘Head Offices’ to become a “logistics company”. WTF!? are they going to brand it? NZ logistics? It just smacks of a big ole circle jerk to me.
Whereas the reality is the job losses will be in smaller communities and there will be more competition for jobs in the provinces.
And it just all fucks me right off; my Auntie was a postie for twenty years and always voted National.
Happy Monday suckers.

tvb

There is no political appetite for this. The economic gains are minimal. It is a case of the political coat far exceeding any possible gain. It will not happen. There is no political constituency for privatisation in New Zealand following the excesses of the late 1980s. That may change but it will take a few more years.

tom hunter

@mm 6:36
…or the US with a panel of judges to pretend that what they are making up now is consistent with what some folks thought 230 years ago.

Not that I want to divert the thread – but the country could always turn to the method by which the Constitution was supposed to be changed to cope with a new world; amendments via the Congress and 3/4 of the states, via winning arguments and votes. Slow but sure – and lasting.

But the failure of the Equal Rights Amendment and the success of Roe v. Wade in the ’70’s caused the US Left-wing to give up on the traditional approach and go for direct SCOTUS decisions instead – the small group of experts who control the commanding heights and whom everybody must obey.

tom hunter

Boris Piscina (965 comments) says:
April 3rd, 2016 at 11:12 pm

Hey, I know, let’s sell everything. I mean absolutely everything.

Suggesting the sale of a couple of dying. government-owned businesses triggers this strawman? FFS. They’re dying because the world – meaning people – increasingly does things in a different way. It changed!

This line of thinking is where you arrive if you follow the Libertarian bent to its ultimate conclusion;

Of course – in the same way that not seeling them means the goverment should nationalise all businesses, because that’s where you arrive if you follow the CVommunist bent to its ultimate conclusion.

Are you getting the point yet, Boris?

… but the human fact remains, there is a need for a degree of socialism in any grouping of humans who want to call themselves a society.
Muldoon knew that. He was the most socialist Prime Minister this country has ever seen and the last great patriotic Prime Minister we ever had, and he epitomised everything that used to be good about our Party.

Everything? The endless petty rules. The Great-Leader-Do-As-I-Say mentality that was the logical result of the bloody government trying to do almost everything? The ultimate, near catastrophic failure of the NZ economy as a result of trying to keep alive myriad, cash-sucking black holes like NZ Post?

People are social creatures and will cooperrate (or not) as they need to, which may mean a degree of “socialism”, but that still does not mean we have to keep zombie institutions alive, especially when the money could be applied to something that’s not dying. This really is not complex theory of any type.

Skippytony

OK, lets think this through. Split KiwiBank out of NZ Post presumably means they would have to fund setting up their own retail network, especially if a slightly more corporatized Post Office was required to charge market rents for using their retail premises.

If you make KiwiBank a listed organisation and want to attract shareholders it will need to produce a satisfactory economic return or else shareholders are standing there ripping up $100 notes, so it would need to act like any other “EVIL” bank – you cant have it both ways.

As to NZ Post, it is probably unsellable already – look at the horrific decay of value in businesses like Yellow Pages and show me how you turn around NZ Post. Its main “asset” is it’s delivery infrastructure, which simply is not going to be part of any UPS fulfilment type operation, and it has high fixed costs in a shrinking market. So not going to win through revenue up, as exercising their dying monopoly position and pushing up rates just accelerates defection of volume. Not going to win through cost out as no one is going to drive those kind of changes – seen any Kiwi Post deliverers on motorbikes in metro areas? Nah. Been doing it in Aussie for about thirty years – here they still tramp. Seen a systematic move to close PO’s with insufficient volumes? hah.

ciaron

When NZPost cannot deliver appointment notices to patients (who live less that 10km from the hospital) in a major city before the day of the appointment; my friends, it is not time to sell it, it’s time to take it out back and shoot it like the feral dog it is.

Not kidding. We’ve had several postal reminders for appointments (with directions to find the unit in the hospital) arrive the day or the day after the appointment. and the post stamp shows they had been posted at least a week prior.

V

@ciaron

More to the point, what is a hospital doing posting out appointment reminders in this day and age?
What is wrong with SMS/Auto Phone Reminder or Email?
Wouldn’t be surprised if the DHB pays the ultra low bulk advertising rate and then expects top sevice.

mikenmild

deadrightkev

“That’s right kev. If everyone followed your health advice, there’d be no need for hospitals at all.”

I advocate one health commission for NZ and a small board of independent directors. NZ is the size of a small city. Its dumb and people are missing out on healthcare because of the waste. Make sense?

All services, including the Fire Service and Ambulance Service would fully funded by the state (not cake stalls and raffles) and come within the health commission but services would be implemented by the private sector through a competitive open book process.

It would save billions and NZ would lead the world in healthcare services.

Why aren’t we already doing it you ask? Because we are run by dumb bastards with no balls or vision.